Here are the top 5 reasons why a signature loan may be a better choice than a payday loan:
- Lower interest rates: Signature loans typically have lower interest rates than payday loans, which can have interest rates that are upwards of 400%. This means you’ll pay less in interest over the life of the loan.
- Longer repayment terms: Signature loans typically have longer repayment terms than payday loans, which means you have more time to pay back the loan. This can make it easier to fit loan payments into your budget.
- Larger loan amounts: Signature loans generally offer larger loan amounts than payday loans. This can be important if you need to borrow a significant amount of money to cover a major expense.
- No collateral required: Signature loans are unsecured, which means you don’t have to put up any collateral to get the loan. This can be a good option if you don’t have any assets to pledge as collateral.
- Better credit reporting: Many signature loan companies report loan payments to credit bureaus, which can help you build your credit score. This can be especially important if you’re trying to improve your credit or establish credit for the first time. In contrast, most payday lenders do not report payments to credit bureaus.